The weakening pricing power of major brand over private label grocery products: evidence from a Dutch retailer

The primary objective of this research is to investigate and quantify how consumers' preference on name brand essential products has changed during the COVID period and beyond as characterized by their marginal willingness to pay for such brands over private labels. Based on existing theories, it is hypothesized that consumers' preference on name brand essential products has been weakened, and there is a shift of preference from name brand products to private label products either before the pandemic, during the COVID-19 pandemic and after the pandemic in the years of 2021 and 2022. We use sales data from a Dutch grocery chain to conduct empirical data analysis using a proposed discrete choice model on several essential product categories. The analysis supports the conjectural shift of preference from name brand products to private label products, which indicates unique growth opportunities and pricing power for private label products in the post-COVID era. These insights provide valuable theoretical and practical implications for retail business practitioners and name brand manufacturers, particularly in inventory planning and pricing strategy of both name brand products and private label products.